DoubleLine Capital’s Jeff Gundlach recommended investors short the S&P 500 Index and go long emerging market stocks. Why do people listen to Gundlach?
Well, there’s size. DoubleLine manages $105 billion in assets. The firm’s Total Return Bond Fund has assets under management of $53 billion and has been a magnet for money over the past seven years.
Then there is the fund’s performance. Here’s how the performance of the firm’s flagship bond fund stacks up against its benchmark in total return percentage terms.
Still, a call from a bond guy to buy emerging market stocks surprised some people. In the past year, the benchmark MSCI Emerging Markets index has done pretty well.
To put that performance in context it makes sense to look back over five years.
The longer-term charts underscore the importance of timing, another reason people listen when someone like Gundlach speaks. The bulk of the gains came between 2004 and 2008.
Gundlach signaled this week he’s going to be more vocal by announcing he created a Twitter handle @TruthGundlach. His inaugural tweet was one word: “test.” A day later he had accumulated almost 8,000 followers and was added to Bloomberg.